27 December 2011

Eyesores vs. Property Rights in a Libertarian Society

Non-libertarians love to come up with ideas about how, in a libertarian society, some ill would occur which (in their mind(s)) cannot be corrected without the violent force of government. Eyesores -- the kind of blight upon a neighborhood that lowers property values -- were recently considered at Libertarian News:

The way [an eyesore] would be dealt with, in the absence of home owners associations, state regulations, zoning restrictions, etc…, is through the homesteading principle. Private law courts would basically look at who was there first and decide based on the homesteading principle.

Consider this example:

If a person owns a home in a nice neighborhood and a pig farmer decides he’s going to setup shop across the street from them, private law courts would uphold any eyesore/smell complaints brought by that homeowner as being legitimate. However, if a person buys a home across the street from a pig farm, then comes to the courts to complain about the eyesore/smell of the farm, the courts would not recognize that complaint as being legitimate. The homeowner bought the home in full knowledge of the condition of the environment around it and agreed to purchase the home at that price, which would surely be at a bargain because of the pig farm.

This homesteading principle applies to all businesses and homes. If a person moves in next door and starts destroying their lawn and putting junkers up on blocks in the front yard, their neighbors have a legitimate right to sue for property value damages if the previous condition of the lot was in good upkeep.

I don't think this is right at all. The first (and probably least costly) mistake, in my mind, is lumping homeowners associations in with state regulations and zoning restrictions. The latter are imposed by the state; the former is usually structured as a private corporation owned and run by the homeowners themselves -- one which would fall completely within the homesteading principle as the author describes it. It is very rare for someone to buy a home and have an association imposed on the property at some later date. Rather, the homeowners association is, almost without exception, the prior existing entity. In this situation, the prospective owner chooses to enter an agreement with the association upon buying a the property, or he selects a different property. The source and legitimacy of homeowners associations' power are of course muddied by state interference; however, for the purpose of this discussion, they can be considered to be completely private, voluntary entities relying solely on contract enforcement to achieve their ends. Inasmuch as this is the case, it is clear that there is at least one means by which eyesores can be dealt with in the absence of state regulation.

The more egregious mistake in the original article is in declaring that property owners have a right or ownership in the value of their property. One of the commenters to the original article jumped on this point:

Nobody has a right to the _value_ of their property, since value is subjective and exists in people's heads. Consider the entrepreneur who creates a brilliant new mode of transport, he hasn't infringed on the rights of car manufacturers, even though his invention has harmed the market price of the cars they're trying to sell. The same is true of the person who decorates his property in a way his neighbor disapproves of--absent a contractual breach, he hasn't infringed on anyone's rights.

And the author conceded the point:

Yeah, you are right that pollution needs to be some kind of physical violation of their property's integrity.

I'm actually not surprised by this mistake. It took me a day of thinking to figure out exactly where the fallacy was. What tipped me off to it, though, was the authors use of the homesteading principle to solve the problem. For those unfamiliar with the homesteading principle, it is the idea that one becomes the rightful owner of some previously unowned property (land) by "mixing his labor" with it. In the author's example, the prior landowner had some amount of veto authority over the latecomer. Using the idea of homesteading, this implies that the prior landowner/homesteader gains not only an interest in the land with which he actually mixes his labor but also in the surrounding land. Not only that, but his interest in the surrounding areas would have to be superior to the latecomer(s) by virtue of the fact that he (apparently) has veto authority over what the latecomer would do with his property. If we follow this line of reasoning further, we'd eventually find that the prior owner could restrict the latecomers free speech rights by declaring that political placards/signs were offensive, freedom of expression by vetoing his choice of color to paint his house, and possibly even his choice of Ford vs. Chevy.

Property rights must be (nearly) absolute as they are the basis for the idea that one owns his own body, the only restriction being that one does not use his property rights to violate another's. And, as I've often heard Stephen Kinsella say, "genuine rights cannot conflict". Therefore, either the latecomer doesn't really own his property -- and, by extension, the first owner owns not only his own land but also has controlling interest in all of the surrounding land -- or the first owner does not really have a right/ownership in the value of his property. I reject the first proposition simply on the basis of the homesteading principle. This owner has not "mixed his labor" with his neighbor's property. Furthermore, assuming the implications of the original author's description of homesteading, there is no logical end to the amount of land to which the first owner could lay claim. This solution is simply unworkable.

We are then left, as the quoted commenter points out, with the idea that there is no ownership in the value of property. This, in my opinion is the correct view. Values are subjective and therefore exist individually only in the minds of the people attempting to appraise the value of an object. As such, attempting to fix or determine a value by law or decree is essentially a form of (attempted) thought control. For more on this subject, Rothbard gives the ownership of "ideas" a thorough treatment in chapter 16 of The Ethics of Liberty.

3 comments:

Unconscionable contracts are void from inception, according to all caselaw.

Homeowners Assn contracts are unconscionable, since they do not have provision exception for illness, disability, old age or other calamity. Thus every person living in the assn WILL have their home stolen by the assn, sooner or later.

Municipal "govts" routinely steal homes from elderly or diabled poeple using "codes enforcement" scams with $1,000/day fines for not cutting grass to a rediculous hieght, in addition to radiaclly raising property tax on people with fixed incomes.

Homeowners assns do the same scam, and are merely a tool for the property developer to continue sucking money for selling overpriced land...forever. Such developers are routinely sued and lose huge verdicts in court for running massive scams to overprice tiny plots of farmland.

I've personally had 350 acres of riverside farmland stolen by bogus eminent domain for a private dam project, paid $1,000/acre. Then, when none of the land was flooded by the new lake, it was given to a developer to sell at $350,000/acre. The developer eventually went bankrupt after stealing a lot of money.

Vote for Ron Paul if you want to live.http://www.youtube.com/watch?v=jRJ2pUV6wEM

@Dragonater: You're talking about homeowners associations under the existing system whose power and legitimacy I described as "muddy", at best, given state interference. I'm no fan of homeowners associations, having lived in places where they existed, but there is no reason to believe that associations of this type could not be a legitimate, voluntary, and peaceful way for homeowners to protect their neighborhoods against eyesores or other undesirable uses of the property around them absent state interference.